FTA Releases Corporate Tax Guide for Non-Resident Income in the UAE



The Federal Tax Authority (FTA) has issued a comprehensive guide for non-resident persons, both natural and juridical, who earn income in the UAE, outlining their obligations under the Corporate Tax Law that became effective on June 1, 2023. This guidance clarifies who is subject to Corporate Tax, the conditions necessitating registration, the calculation of taxable income, and other compliance mandates.

The FTA's guide serves as an essential resource for non-residents, providing simplified explanations and practical examples to assist them in determining their Corporate Tax liabilities in the UAE. The press release encourages non-resident individuals and entities generating UAE-sourced income or conducting business activities within the country to refer to this new guide, the Corporate Tax Law, relevant decisions, and additional resources available on the FTA website.

Key points from the guide include:

Non-resident individuals must register for Corporate Tax if they have a Permanent Establishment in the UAE with turnover exceeding AED 1,000,000 in a calendar year, or if they derive state-sourced income.

Juridical non-resident entities are subject to Corporate Tax if they have a Permanent Establishment, derive state-sourced income, or have a nexus in the UAE through income from immovable property.

Non-residents with a Permanent Establishment or a nexus in the UAE must obtain a Tax Registration Number (TRN) to ensure compliance and avoid penalties.

Non-resident juridical persons deriving only state-sourced income without a Permanent Establishment or nexus in the UAE are not required to register for Corporate Tax.

The FTA emphasizes the importance of a thorough review of the guide to gain a clear understanding of the definitions and rules applicable to non-resident taxpayers under the UAE Corporate Tax system. This initiative aims to support non-residents in efficiently meeting their tax obligations and contributing to the transparency and efficiency of the UAE's tax system.